Mobile makes millions -- but it's not as simple as it seems

I write The Digital Life, a monthly tech column
in our sister CondéNast magazine, GQ. This is my column from last
month's issue (dated April). To subscribe to GQ, click here.
Do you seriously want to become rich? Here's the secret -- and
it's got nothing to do with building an online social network, or even getting the Government to bail out your
bank. To paraphrase Mr McGuire from The Graduate, I want
to say one word to you. Just one word.

Mobile.

Like, duh, yeah, you knew that mobile phones were the next
big thing, what, a dozen years ago? And in between playing Angry Birds and tweeting from the
Apple Store, you
didn't need reminding that apps were going to make
us all millionaires. Except...there's a far more fundamental
business opportunity facing you right at this moment, and most
people are unaware of the vast economic possibilities right in
front of them. Quite simply, the mobile internet is undergoing such
unprecedented growth today that anyone with a smart, relevant idea
has a head start in building a profitable mobile business.

A few numbers will explain why mobile is today's big growth
opportunity. Remember how excited we got a decade ago about this
new thing called the desktop internet, which AOL was persuading
consumers to sign up to en masse using a blitz of CD-Roms? A little over three years after AOL had launched its
service, it had some nine million customers, which is pretty good
going. Yet in the same timescale after launch, Apple had sold some
120 million of its mobile online devices (iPads, iPhones and iPod Touches). As
Morgan Stanley points out, that's a growth curve for the mobile
internet that's around twelve times as steep as that for the
desktop internet when rolled out -- and we all remember how
transformative that was. The speed of mobile-internet take-up, says
Morgan Stanley, is a revolution "the likes of which we haven't seen
before".

Here are a few other numbers. In Kenya, where a
four-year-old business called M-Pesa lets you send and receive cash
through your cellphone, it's proved so popular -- replacing the
banks in ordinary citizens' lives - that a quarter of the entire
Kenyan GDP now passes through it. That's behaviour change on a
massive scale. A couple of months ago, Twitter co-founder Jack
Dorsey launched a new business in America called Square
that allows anyone with a smartphone to send and receive
credit-card payments by plugging a small plastic card-reader into
their phone. Already he's forecasting some $1.1 billion in
transactions by June. Then there is the amazingly fast-growing
industry in virtual goods traded on mobile devices in games such as
Farmville and Pet Society. Last year we spent $1.6 billion on
virtual goods in iPhone apps alone - four times as much as was
spent on advertising in App Store apps.

Mad numbers, right? So what does all this mean for you? This, says
Finnish mobile-industry consultant Tomi Ahonen, is just the start -- because mobile is going to
get much, much bigger. "It is the fastest-growing giant industry of
the economic history of mankind," Ahonen says, "and it's barely
begun." Because, though it's worth $1.1 trillion now -- ten times
as big as radio -- over the next two decades that value will rise
to $5 trillion. And who wouldn't want a piece?

Ahonen has just written an extraordinary 24,000-word blog post on
where he sees the opportunities. The internet, he points out, did
not change everything, as has often been claimed: sure, it reaches
1.7 billion people, but that's nothing on the 5 billion with a
mobile. Very few industries can serve us, and make money out of us,
from early childhood to old age, he says -- and even reach us in
our sleep, thanks to our habit of keeping our phone close to the
pillow with the ringer on. So this magical technology will
inevitably transform "retail, banking, insurance, travel,
entertainment, education, health, government, farming, fishing,
forestry -- everything!"

Where do you start, then? According to Ahonen, the money won't be
in smartphone apps. iPhones reach just 2 percent of the planet --
and apps generate tiny revenue compared with more traditional text-messaging and multimedia-messaging services. Last year, we
sent some 6,100,000,000,000 text messages -- that's 200,000 every
second. With 4.2 billion active SMS users, think of a service that
can persuade just a million or two of them to pay you a few
pennies. You can deliver everything from horoscopes to airline
tickets to cash via SMS. Old-school, but proven.

Nor is the money in location-based niche services such as Foursquare,
Ahonen says, or in glitzy browser-based video. It's in reaching the
billions who simply want to be connected, whether by SMS or
old-fashioned services such as WAP. And they'll spend if you offer them a service.

After all, the world's richest man is no longer Bill Gates. It's Carlos Slim - who, remember, made his fortune
in the mobile industry. And he won't be the last.

David Rowan is editor of Wired
magazine

Edited by Alice Vincent

Comments

"Because, though it's worth $1.1 trillion now -- ten times as big as radio -- over the next two decades that value will rise to $5 billion."--eh?

felix

Apr 7th 2011

In today's world a simple idea can make you rich, But it needs also a hard work and opportunities, as you said "Mobile makes millions" but you also have define that "but it's not as simple as it seems", So we can learn a lesson from it, 360 degree feedback.